A conceptual framework of ethical considerations and legal constraints in the algorithm-driven pricing function | Weatherhead School at Case Western Reserve University

A conceptual framework of ethical considerations and legal constraints in the algorithm-driven pricing function

A conceptual framework of ethical considerations and legal constraints in the algorithm-driven pricing function

Authors

  • Joshua A . Gerlick
  • Stephan M . Liozu

Website

http:// https://dx.doi.org/10.2139/ssrn.3454123

Abstract

The extent to which pricing executives consider consumer perceptions of deception, fairness, and social justice is positioned within an emerging area of research that triangulates the dynamic between legal constraints, ethical considerations, and algorithmic models to make pricing decisions. This paper builds a conceptual model from an analysis of literature describing how companies couple organizational and technology factors into the price-setting process. The legal frameworks of antitrust, data privacy, and antidiscrimination are tethered to the ethical frameworks of deception, fairness, and social justice to form a foundation of relevant organizational factors. A qualitative study is proposed to test the validity of the conceptual model. The primary contribution of this paper is to catalyze practitioner discussion and spur empirical research into the implications of personalized pricing using algorithmic models.